New article on Incentives and tournaments in public organizations

Advances in economic theory help us rethink the traditional public administration concern for accountability and performance in government. Reforms in government have concentrated on organizational designs that flow from piece-rate approaches to employee compensation, but they have largely ignored the prospects for incentive-compatibility within traditional personnel systems. There are important reasons to believe that competitive tournaments in public organization hierarchies, perhaps implemented in promotion systems, could be more effective than the pay-for-performance systems often called for in traditional principal-agent approaches, and therefore can be a useful component of the design of bureaucracies. More importantly, knowledge about tournaments in organizations helps us reconsider key institutional features of public bureaucracies.